Service Bundling Needed to Boost European Mobile Operators
Something unpleasant is happening to European mobile network operators (MNOs), Yankee Group says in a new report on the industry.
Customer growth is more elusive, average revenue per user (ARPU) and service revenue are flat or declining, profitability is under pressure and cost-cutting programs are commonplace, the report says. “It’s not a pretty picture.”
If MNOs cannot restore their businesses to good health, the entire mobile communications ecosystem will be threatened.
The report uses Germany as a case study because “it’s big, it’s competitive and it’s representative of what is either already happening or is about to happen in most other European countries.”
Despite their best efforts to stimulate usage, to succeed in the future MNOs must look beyond the services that have served them so well in the past, according to the report Waking a Comatose Mobile Market.
The Yankee Group does not believe future minutes of use (MOU) increases will translate into ARPU gains. “Average revenue per minute (ARPM) will fall faster than the rate at which MOU increases.”
The report, which includes recommendations for MNOs, sees service bundling as a big part of the long-term solution to the industry’s challenges.
The cure for revenue stagnation is to expand to adjacent markets, while simultaneously using subbrands to win tactical day-to-day battles for market share.
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